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Indian pharma exports 'set for 20% growth' to 2018

Published on 23/10/13 at 09:57am
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Representatives of India's pharma sector pledged to meet the government's target of raising exports to $25 billion by 2016, as the CPhI conference got underway in Frankfurt, Germany, this week.

Currently, Indian exports of pharma products are running at around $15 billion a year and have grown at an ‘explosive’ rate of 24% over the last four years, according to the Pharmexcil trade body representing pharma exporters and the India Brand Equity Foundation (IBEF).

The two organisations said India's drug sector - which was recognised in UNICEF's Supply Annual Report as the largest supplier of generic medicines globally - has a commitment to lowering the cost of vital medicines through its development expertise.

"We are expecting a compound annual growth rate (CAGR) of around 20% in the next five years," said Dr P. V. Appaji, Phamexcil's director general, noting this will be an advance on the 17% growth seen over the last three years.

More than half (55%) of exports are destined to highly regulated western markets, but Pharmexcil and IBEF see much of the upside will come from emerging economies where "India is single-handedly improving access to life-saving medicines".

The bullish assessment of India's pharma sector comes at a time when the industry has struggled with a few setbacks, despite its recent growth, and in fact the $25 billion target had earlier been set for the 2014-2015 timeframe.

The industry is facing greater competition, both internally as the big national players are all pursuing the same generic targets, and to some extent externally as big pharma firms get into branded generics.

Meanwhile, claims that the country has become a source of counterfeits, as well as quality issues affecting top-tier Indian generic manufacturers such as Ranbaxy and Wockhardt, have called the safety of exported medicines into question.

The latter issue is not so much that quality lapses occur, but rather a failure in some cases to remedy the problems in a timely manner.

To address the counterfeiting issue, the Indian government has implemented new legislation to help restore confidence in its exported products, including pack-level serialisation of medicines designed to introduce a track-and-trace system that - from July 2014 - will make it easier to differentiate legitimate medicines from spurious products.

Meanwhile, India looks set to take another step forward in safeguarding its pharma export sector if - as seems likely - it applies to join the Pharmaceutical Inspection Convention and Pharmaceutical Inspection Co-operation Scheme (PIC/S), which develops and promotes harmonised Good Manufacturing Practice (GMP) standards.

"India's pharma industry has undergone a sustained period of consolidated expansion, thanks to the government's ability to facilitate policies and economic conditions that have fostered growth," commented Aparna Dutt Sharma, chief executive of the IBEF.

"When nations across the globe are grappling with increased resource requirements for growing healthcare needs, Indian pharma offers credible and affordable healthcare solutions," she added.

Shift towards research-based industry

Commentators see the next phase of development for India's pharma industry as resting on the nurturing of a research-based sector that starts to produce its own innovative medicines.

In support of these goals, the Indian government has already put in place supportive initiatives with the goal of cementing the country's position, for example by making tax breaks available to pharma manufacturers along with a weighted tax deduction of 150% for any R&D expenditures.

The government has also introduced 19 dedicated Special Economic Zones (SEZs) to help stimulate pharma sector investment across the country, and the Department of Pharmaceuticals has also set aside $478 million to set up 10 more National Institutes of Pharmaceutical Education and Research (NIPER).

As a result of these initiatives, it is predicted that R&D expenditure will continue to grow at an annualised rate of nearly 20% for the next few years, according to the trade representatives, although much of the spending at the moment is on refinement of existing processes rather than drug discovery.

A report issued by the IBEF earlier this year found that Dr. Reddy’s, Lupin Labs, Sun Pharma, Ranbaxy and Cipla had invested over $500 million in R&D this year, which is already allowing increased innovation in manufacturing processes  to help to lower the cost of medicines production.

"We have … been able to lower the cost of vital medicines in the developing world," said Sudhanshu Pandey, joint secretary of the Department of Commerce at India's Ministry of Commerce and Industry. "The cost of HIV/AIDS treatment [has been] lowered to $400 per year from $12,000," he added.

Phil Taylor

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